What is ERP?

In my Open source and busi­ness strate­gies post I men­tioned that we have planned to only use open source soft­ware for man­ag­ing our busi­ness processes. I teach at a busi­ness uni­ver­sity who part­ners with SAP and there­fore we offer courses on how to use that soft­ware. At the same time I work on projects with many small and middle-sized busi­nesses that still use Excel or a sim­ple data­base in Access to man­age their cus­tomer rela­tion­ships. Well, to tell the truth, there are still some busi­ness own­ers only using a small black book filled with addresses and notes. Many of these busi­nesses are small fam­ily busi­nesses and when I talk about CRM or ERP, they have no clue of what I’m talk­ing about.

As a teacher I’ve learned to not assume peo­ple know what I mean, so I will start this post by shortly describ­ing what ERP is and what type of soft­ware I need. ERP means Enter­prise Resource Plan­ning, and Wikipedia says ERP sys­tems attempt to inte­grate all data and processes of an orga­ni­za­tion into a uni­fied sys­tem. A typ­i­cal ERP sys­tem will use mul­ti­ple mod­ules of com­puter soft­ware to help inte­grate what used to be stand alone appli­ca­tions into one inte­grated sys­tem. A key ingre­di­ent of most ERP sys­tems is the use of a data­base to store data for the var­i­ous sys­tem mod­ules. ERP sys­tems attempt to cover all basic func­tions of an enter­prise, regard­less of the organization’s busi­ness type.

Exam­ples of mod­ules in an ERP are: Man­u­fac­tur­ing, Sup­ply Chain, Finan­cials, Cus­tomer Rela­tion­ship Man­age­ment (CRM), Human Resources, Ware­house Man­age­ment and Deci­sion Sup­port Sys­tem.

Doesn’t mat­ter what type of busi­ness you do, with­out a cus­tomer there will be no busi­ness. That means stor­ing infor­ma­tion of our cus­tomers will be the most impor­tant part. I don’t know yet for sure, but for now it looks like we will have both con­sumers and busi­nesses as cus­tomers, so we need to be able to cat­e­go­rize our cus­tomers. And even though we are plan­ning only a web based busi­ness, we haven’t ruled out a brick and mor­tal store. My sis­ter owns a hair saloon and our prod­ucts could eas­ily be sold at her saloon.

With sales both in Europe and in US we need to be able to han­dle dif­fer­ent cur­ren­cies. We also need to be able to track sales in US and in Europe sep­a­rately. I don’t know who will do the account­ing yet, both me and my daugh­ters have the proper edu­ca­tion for tak­ing care of the account­ing in Fin­land, butwe have no knowl­edge of how to han­dle account­ing in US.

There are a lot more we need to fig­ure out before we decide which sys­tem to use, but these are to most impor­tant parts.

In a com­ment to my pre­vi­ous post Com­piere was men­tioned, I have already installed another open source sys­tem called Open­Bravo. There are oth­ers I haven’t checked out yet, like Adem­piere, ERP5, Tiny­ERP, OFBiz, and Open­taps. There are prob­a­bly even more sys­tems than this. The Enter­prise cat­e­gory on Source­Forge returned 1772 projects out of which Open­Bravo was the most active with ADem­piere Bazaar on sec­ond place.

I was lucky enough to find a blog called Open Source ERP Guru with a lot of infor­ma­tion about dif­fer­ent ERP sys­tems. I’m going to check the blog out before I decide which sys­tem to check next. I rec­om­mend every­one who’s out there look­ing for an ERP sys­tem to check out the blog too.

Wel­come back! Nice to see you again, hope you enjoy your visit.

Related posts

• Octo­ber 18, 2009 — Fab­rics design (1)
• Feb­ru­ary 18, 2008 — Mak­ing a liv­ing and hap­pi­ness (4)
• Jan­u­ary 26, 2008 — I believe in Open Busi­ness (5)